Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified

500.com

(

WBAI

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified 500.com as such a stock due to the following factors:

  • WBAI has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $6.3 million.
  • WBAI has traded 347,765 shares today.
  • WBAI is trading at 5.21 times the normal volume for the stock at this time of day.
  • WBAI is trading at a new low 3.04% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on WBAI:

500.com Limited provides online sports lottery services in the People's Republic of China. It operates as an aggregator and processor of lottery purchase orders from its registered user accounts. WBAI has a PE ratio of 29.4. Currently there is 1 analyst that rates 500.com a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for 500.com has been 603,800 shares per day over the past 30 days. 500.com has a market cap of $690.6 million and is part of the services sector and leisure industry. Shares are down 45.7% year-to-date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates 500.com as a

sell

. The area that we feel has been the company's primary weakness has been its generally disappointing historical performance in the stock itself.

Highlights from the ratings report include:

  • WBAI's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 41.29%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter.
  • 500.COM LTD -ADR reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This year, the market expects an improvement in earnings ($1.19 versus $0.51).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income increased by 216.7% when compared to the same quarter one year prior, rising from $2.04 million to $6.45 million.
  • WBAI has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 6.64, which clearly demonstrates the ability to cover short-term cash needs.
  • Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, 500.COM LTD -ADR has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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